Lord Garden: My Lords, the Defence Select Committee took evidence yesterday on Afghanistan and MoD officials made it clear that there was still some way to go in NATO before there is any agreement on force generation for this new enlarged task in the south and, later, in the east. What representations are the British Government making on these force-generation proposals in order to ensure that the protection of NGOs and DfID-type aid assets is considered a sufficient priority rather than the counter-terrorist activities?

Baroness Amos: My Lords, I am not sure that the figure cited by my noble friend is entirely accurate. The latest figures that I saw showed that the percentage of area given over to poppy production had decreased. However, although the area was smaller, the quantity produced had not changed much because of an increase in the quality of what was produced. So I think that the figure has stayed about the same. My noble friend is absolutely right that this is something that we, with the government of Afghanistan, must get under control. We are working with them particularly on providing alternative livelihoods, but that will take some time to establish.

Lord Sainsbury of Turville: My Lords, in response to a previous Question I covered in great detail how we are looking at the breakdown. As I recall, there are three possibilities in terms of what the legislation will say. I cannot remember the exact details, but I will write to the noble Lord telling him what the Answer was on that occasion.

Lord Goldsmith: My Lords, I agree with my noble friend. In the past we perhaps concentrated a great deal on the most serous offences and did not concentrate enough on the offences which affect far more people ultimately than the most serious offences do. My noble friend is absolutely right that flexibility to respond to local needs is important, and the Government believe in working in partnership with local agencies and authorities to achieve that end.

Lord Goldsmith: My Lords, the noble and learned will know better than I do. I believe that the Sentencing Guidelines Council is looking at this issue. If not, I agree that it ought to do so. Of course, the decision as to what the sanction should be is for the courts to determine. But, at the same time—I wonder whether the noble and learned Lord would agree; I suspect that he would—respect for the court's order is also extremely important. So, even though the order was originally imposed for conduct which might not of itself have resulted in imprisonment, not respecting an order which has been imposed by the court may well justify the court in now saying that custody is the only step to take.

Lord Faulkner of Worcester: My Lords, does my noble and learned friend agree that one of the most welcome features of the new policy on prostitution announced by the Home Office yesterday is the emphasis on encouraging prostitutes to seek treatment for drug addiction and to seek help with leaving the sex industry? That being so, will he confirm that one of the consequences will be that fewer ASBOs will be served on prostitutes in future, which I think most people in the industry—I mean, most people in society recognise is an inappropriate way of dealing with the problem?

Lord Livsey of Talgarth: My Lords, the amendment addresses the need to persuade the Secretary of State and the Minister in the Welsh Assembly Government to fund the administration costs of common registration authorities. I tabled this amendment because there is great concern among commons registration authorities—that is, in the local authorities—that this legislation will create a considerable amount of work. The work will include computerised mapping, the translation to computers of maps from 1905, which, in some local authorities, mostly demarcate the well known boundaries of commons in their locality. It is painstaking work that requires a great deal of accuracy. The level of human resources needed to carry out the time-consuming work of implementing electronic registers—it is certainly not required of commons registration authorities in all local authorities—is expensive. The legislation must be effective and effectively run. Our question is whether the Government want the legislation to be successful. It will not be unless resources are adequate to cover a massive land area of England and Wales—in the area that I come from, one-third of the land area.
	The subject was raised in Committee and also, as I am sure the Minister knows, in a meeting between commons registration authorities and Defra in the first half of 2005, in Cheltenham. The information from that meeting was that around £100,000 would be available. In the comments made to me, given the magnitude of the task that I described, that sum was felt to be wholly inadequate to meet the job that the commons registration authorities will have as a result of the legislation. I think that I have made the point very clearly on this amendment; therefore, I beg to move.

Baroness Byford: My Lords, I have sympathy with the amendment because whether—following on from the comments of the noble Lord, Lord Williams of Elvel—it is the taxpayer in paying central taxes or us paying taxes at a local level, the cost must be met by someone. The matter was raised at earlier stages of consideration, and it was suggested to the noble Lord that he put it to a vote at that time, so I understand why he has come back with it.
	This is an important point; the process will cost money and the Government know that it will cost money. In the response that I had on Report the noble Baroness, Lady Farrington, said that the funding,
	"will . . . be provided, at least initially, on a targeted basis".—[Official Report, 28/11/05; col. 58.]
	Have the Government given any more thought to that? Have they decided how it will be targeted, or will that be left to each and every individual authority to decide when they bring it forward? No real assurance was given—and I do not believe that we have received a follow-up letter—on what the Government have in mind about how it would be organised.
	The figure of £100,000 is fairly near what was quoted; if you divide that among the various local authorities, it is peanuts in certain areas—and obviously not applicable in others. Although the noble Lord had a slightly rough ride on Report, this question should be answered, and at this stage we have not had it answered. I hope that the Minister will be able to do that.

Lord Bach: My Lords, the amendment would require the Government to fund the costs of commons registration authorities in meeting the additional burdens imposed by Part 1. Our position on funding the costs of Part 1 is quite clear, but let me briefly repeat our case.
	The Government are committed to funding new burdens placed on local authorities. So it is that local authorities will be provided with funding from the Government for any new burdens arising under this Bill, including those relating to updating the registers, in so far as they are not met by funding from other sources, such as fees. Funding for Welsh local authorities will of course be a matter for the National Assembly.
	When the Bill merely retains existing duties on commons registration authorities, arising under the Commons Registration Act 1965, we will not be providing additional funding. In particular, that includes the requirement on authorities to keep commons registers. But Defra will provide additional funding to authorities for new or enhanced duties that arise from the Bill.
	Once the registers are up to date, it will be incumbent on both authorities and those with an interest in common land to fulfil their statutory responsibilities. People will generally need to pay fees for amendments to the registers, and authorities must keep the registers up to date. Funding will not be provided for those activities that are funded through fees, nor for applications to register new town or village greens which are already funded other than to the extent that new regulations may place new burdens on registration authorities. Where fees are waived or reduced in the public interest, then that too will need to be taken into account.
	The costs of bringing the registers up to date are expected to vary greatly between local authorities, but the overall costs are not expected to be high. The regulatory impact assessment contains estimates of new costs and copies have been placed in the Library of the House. The assessment will be updated in the usual way at Royal Assent.
	We expect to roll out the implementation of Part 1 by beginning with a pilot scheme in a small number of registration authority areas. The identification of those pilot areas, and the amount of the required funding, will be considered as part of that pilot programme and in association with the Local Government Association.
	We propose to target resources initially, so that additional funding hits the mark. The pilot programme will also enable us to refine the question of costs, and seek agreement on a formula which can be applied across English commons registration authorities.
	Finally, we will also be working with registration authorities over the months ahead to establish the new association of commons registration officers on a sound footing. That will provide an important medium for communication between officers, Defra and the Welsh Assembly Government, and I am pleased to report that there is already real enthusiasm among registration officers to take this project forward. I see a valuable role for the association in helping us to implement the Bill in a practical and cost-effective manner.
	I was asked why the taxpayer should have to pay. The Bill reflects the fact that there is a public interest in the management of common land and in ensuring that the registers are brought up to date. As I say, the cost arising from any new aspects of the Bill will be met from both user fees and public funding.

Lord Livsey of Talgarth: My Lords, I thank the Minister for that response. I am sure that the amendment will be noted in the other place. However, the Minister's response, which referred to new burdens and existing ones which originate in the 1965 Act, needs to be quantified. I was very pleased to hear the Minister address the question of pursuing pilot areas and that there will be a review. I trust that, in looking at the pilot areas and recording what goes on, a very clear definition as regards new burdens and existing ones will emerge, and that that will assist Defra and the Welsh Assembly Government to decide what level of funding is appropriate given the new burdens that will result from this legislation.
	I was very pleased to hear the Minister refer to the association of commons registration officers. There is enthusiasm for that association and I am sure that it will produce a greater degree of cohesion among different commons registration authorities, which vary in their practices and their effectiveness. I hope that that measure will improve the situation over time.
	In view of what the Minister has said, particularly that the system will be piloted—I would be very interested indeed to see the outcome of that—I beg leave to withdraw Amendment No. 1.

Lord Livsey of Talgarth: My Lords, I thank the Minister for that response. Of course we accept what she says about the panel and the way that it would function. But there are important points of principle and obviously we beg to differ on whether this matter should be made statutory or just put in regulations. One critical factor is the independence of the adjudicators and their ability to look at this issue in a focused and objective way. I note what the Minister said about lawyers. I do not have a remit for them but I listen to what they say and try to evaluate it.
	Some issues of principle should be considered. In particular, Part 1 deals with problems of registration and correction and matters of that kind. But in the case, for example, of the vesting of unclaimed common land, we are not talking about grazing rights, but about ownership. Therefore, strictly speaking, that is not part of Part 1. I merely put that to the Minister because the commons commissioners could operate over a very wide field. At present, it is a function of the commons commissioners, but they are being wiped out as a result of the cancellation of the Commons Registration Act 1965.
	So far as concerns subsection (4)(b) in my amendment, about 35 to 40 town and village green inquiries go on every year. They are run by local authorities and, if the Bill stands as it is, sometimes expensive private barristers will have to be engaged and decisions taken, often because there will be no statutory force. In fact, in strict terms of law, I am "informed" that this measure will not stand up at all well, as apparently will be the case in terms of the early part of the amendment of which I spoke.
	So the matter about which I have just spoken—that is, the fact that there is some doubt—will be corrected by the insertion of subsection (4)(b) in our amendment as legally qualified inspectors would conduct the inquiries and would come to conclusions which, I am informed, might stand up better than the way that the Bill is drafted at present. I am sure that the Minister will have taken note of that and, indeed, as she says—and I agree—the Government have come at least halfway. I am sure that people will have noted the contents of this debate and, in those terms, I wish—

Lord Brabazon of Tara: My Lords, the Question is that this amendment be agreed to. As many as are of that opinion will say, "Content". To the contrary, "Not-Content". The Not-Contents have it.
	On Question, amendment negatived.

Lord Bach: My Lords, this group contains a whole series of government amendments. I shall speak to and move Amendment No. 3 and speak to Amendments Nos. 4, 5, 6, 10, 11, 25, 26, 27 and 28. Then, with the leave of the House, I shall sit down so that noble Lords can speak to their amendments in the group and then I shall attempt to respond.
	These amendments give effect to our undertaking on Report to bring forward amendments to enable the Secretary of State to prescribe for permanent severance of rights of common. First, I should explain the structure of the amendments. In seeking to add to Clause 9 to provide for permanent severance by order, we have run up against the capacity of that clause to absorb further provisions. I hope noble Lords agree. It already takes up two pages of the Bill and has 16 subsections. We propose the introduction of a new schedule to be placed before the existing Schedule 1 to accommodate the three classes of exception to the prohibition on severance which remains the core purpose of Clause 9.
	Last week, I wrote to noble Lords including an analysis of changes to the text of Clause 9, which I hope has been helpful. I draw attention particularly to the new schedule, which is contained in Amendment No. 28. Proposed new paragraph 1 now contains the existing exceptions in Clause 9(3) to (7) to enable the severance of rights in favour of Natural England, the Countryside Council for Wales and commons associations, with some minor and consequential drafting amendments.
	On Report, I agreed to consider the then Amendment No. 9, tabled by the noble Lord, Lord Greaves, so that where Natural England or the Countryside Council for Wales gives notice to the landowner and any commons association of its intention to acquire rights of common by severance, that body should have regard to representations received from the bodies to which notice is given. We gave further thought to that matter and our conclusion is that an amendment to impose such a duty would, in effect, be redundant because—I can assure the noble Lord of this—the public law inevitably requires those bodies to have regard to any such representations received in response to the notice given. I hope that putting that remark on the record today puts that matter beyond doubt.
	Paragraph 2 of the proposed new schedule repeats the existing provisions in subsections (8) to (11) to confer powers to enable the temporary letting or leasing of rights of common. The only substantive change is that these powers are now to be exercised by order instead of regulation. Paragraph 3 of the proposed new schedule contains our provision enabling permanent severance. It is worth repeating myself on this matter. Noble Lords will know that these amendments follow from the debate on an amendment tabled by the noble Lord, Lord Inglewood, who, again, I am afraid is not well enough to be with us today. We all wish him a speedy recovery. He said that there was merit in enabling some limited provision in legislation for permanent exceptions to the prohibition on severance. In making those remarks I believe he relied heavily on his Cumbrian background. He said that the Bill is,
	"to set the framework for the administration of common land in Britain for the next 40 years",
	and to have such provisions on the statute book,
	"would be a good thing".—[Official Report, 28/11/05; cols. 28–29.]
	In agreeing to bring forward such amendments, I said—and I repeat—that the power would be a reserved power. That remains the basis of our thinking. We do not plan to make many orders under proposed new paragraph 3—indeed we do not plan to make any orders at all—but if these amendments are accepted, the power will be available if circumstances change and a good case can be made for them. Noble Lords will have noted that paragraph 3(4) of the proposed new schedule requires that an order must provide for the consent of the owner of a common to be obtained to any authorised act of permanent severance. I believe that that fulfils the term of the compromise that I signalled on Report. I hope noble Lords accept that. We have had some indication that there may be room to refine the terms of this condition, and we are open to discussion even as the Bill moves to another place. While we may look for a consensus on an alternative form of words, we think it right that this should be the default position in this amendment.
	Proposed new paragraph 3(7) enables an order to provide that a severance may take place only so that the right is transferred to another commoner and that, in such a case, the order may require the severed right to be registered as attached to that commoner's own holding in order for the severance to be effective. That option will be available to the national authority, and picks up a condition which was present in the amendment put forward by the noble Lord, Lord Inglewood. We are simply providing for the possibility, without committing to the particular outcome.
	There are various other government amendments in this group. With the leave of the House, I will not dwell on them. They are essentially paving and consequential amendments and if they raise any particular questions in noble Lords' minds—frankly, I hope they do not—I shall do my best to respond. I beg to move.

Lord Tyler: My Lords, I share the concerns of the noble Lord, Lord Williams, and I support the amendments to which my noble friend has referred. I have another problem. I hope that the Minister will be able to address it and clarify the position that would arise if his Amendment No. 28, the new schedule, is passed with the other amendments to Clause 9. Like other members including the noble Earl, Lord Peel, I accept that the Government have gone a long way to meeting the concerns expressed on Report.
	I think that we are in the territory of unintended consequences when it comes to Dartmoor. I hope that the Minister will be able to give some assurances and clarification on that. As I understand it, the way in which the Bill has developed in your Lordships' House means that two matters have been added to the powers of a statutory association in Clause 9, which the Dartmoor Commoners Council does not at present possess. They are the power to veto the admittedly limited severance of a right of common from the land to which it has been historically attached, with which we are concerned in these amendments; and the power to receive and thus own rights so severed, to which reference has already been made.
	I think that the Minister will acknowledge that this Bill owes a great deal to the Dartmoor Commons Act 1985. We have had the benefit, if you like, of a pilot project in one part of the country, and useful lessons have been learnt from it. But the prohibition of severance in that Act, which has applied for 20 years without challenge or any problems arising of which I or the commoners' council is aware, should be taken into account.
	The Bill as it stands would, under Schedule 5, as I understand it, repeal Section 8 of the Dartmoor Commons Act 1985, which would mean, uniquely, that Dartmoor would not have the same powers as we are giving to the new commons associations. That is clearly an extraordinary situation. It really is rather odd that there is a very successful pilot project that everybody on all sides of your Lordships' House recognises as such, on which we are basing the experience for this Bill, and yet we are preventing that particular commoners council from doing the job that we believe others should be doing.
	This grievance is perceived by the council. I understand that it has been notified to the noble Lord's department. I hope that, maybe either today in your Lordships' House or when the Bill goes to the other place, there may be an opportunity to redress it. Clearly, there are different ways that that might be undertaken. It could be dealt with in the new schedule in government Amendment No. 28, which we are now debating. I very much understand the references to regulations, which we are not going to see just yet, but perhaps it can be dealt with in those. There could be a positive reference to the Dartmoor Commons Act 1985 at some point. That would now have to be done in the other place. That Act could be amended in a schedule to the Bill. Clause 9 could include some reference to a commons association to include the Dartmoor Commoners Council. However, it seems to me—although I am no expert and I hope that the Minister will be able to respond positively—that the most practical way to deal with the matter may be under regulation, which would mean that we do not have to deal with it right now.
	I very much hope that the Minister will be able to respond positively and acknowledge the concerns of those who have so effectively used the Dartmoor Act and have therefore provided so much experience and expertise that has so well informed this debate.

The Duke of Montrose: My Lords, first, we thank the Minister for all his co-operation in what he has produced, especially on behalf of my noble friend Lord Inglewood, whose points he took on board with such detailed care.
	On Amendment No. 29, tabled by the noble Lord, Lord Livsey, on the question of which public body should take over, I can see his point that if Natural England or any other body took over a small part of a common and then extinguished the rights, that would be an absolute disaster. If it succeeded in gaining severance of all rights, we might consider whether it should be able to distinguish those rights, but there is a danger of piecemeal severance of a common going to Natural England or some such body.
	To return to the point made by the noble Lord, Lord Tyler, only last night, we received a letter from Professor Mercer, chairman of the Dartmoor Commoners Council. Despite its late arrival, I am sure that noble Lords will appreciate the importance of his contribution. As the noble Lord, Lord Tyler, told the House, Professor Mercer states:
	"the present bill, and the work which led up to it . . . has fed in part from the Dartmoor Commons Act 1985 and our experience since then".
	However, it seems that in changing our attitude to severance, there has been an oversight that he feels that we would want to correct. The letter continues:
	"The repeal of our Section 8 diminishes the protection of the historic process of commons management on Dartmoor, and yet any other common or block of commons will have—provided an association is formed—greater protection under the present Bill. Its association can veto the only exception to general severance in favour of a third party, and can ensure that right grazing levels are sustained by having at its disposal rights to deploy (directly or by lease or license) on the common in question".
	It seems that we have omitted to provide for the fact that Dartmoor will not have an association but retain its council.
	Unfortunately, this letter came to my attention too late for us to table amendments through the usual channels. However, I would be grateful if noble Lords would allow me to read out Professor Mercer's brief suggestions, so that we all have food for thought. Professor Mercer suggests four options:
	"(a) a positive reference to the Dartmoor Commons Act (1985) and its Commoners Council rather than the lone negative implied by repeal, perhaps by a 'miscellaneous' clause or in a schedule which accorded statutory association status to the Council, after all Clause 32.2.e already gives the national authority necessary power over the Council's processes
	(b) amend the 1985 Act, in this Bill's Schedule 4, by inserting in its Schedule 2 Section 1 a sentence applying all the functions and obligations of a statutory Commons Association (2006) to the Council
	(c) apply Clause 9 of this Bill to the 1985 Act with a rider that all references to a commons association should be read as including the Dartmoor Commoners Council
	(d) if it is feasible by Regulation give this Council the powers of a statutory association, and get the minister to commit to that in debate".
	He also says that he would be grateful for our help and that he is asking the noble Lord, Lord Tyler, for his help too, as noble Lords will have heard today.
	The amendments in this group, particularly the amendment moved by the Minister, are a very good example of how the Government are listening, but it seems that they have the capability of listening only by enabling all sorts of things to be done by regulation. So even if we are burying Edward I and his Commons Act 1285, Henry I and his heirs are still rubbing their hands with a certain amount of glee.
	In paragraph 1(2)(a) and (b) of the new Schedule proposed in government Amendment No. 28, there is no measure to ensure that persons who wish to sever a right of common have a duty to inform the commons association as well as the owner of the land, although subparagraph (2)(b) perhaps implies that. Is that not required, or is it simply not clear enough to me? On the question of temporary severance and leasing, will the Minister clarify the meaning of the phrase "framed by reference"? Does that mean that the provisions and rules referred to will be constrained by their relevance to particular land or descriptions of land, or to descriptions of persons to whom the rights of common may be leased or licensed? If so, what effect will that have?
	Perhaps this is superfluous, but I wonder whether there is a typing error in paragraph 3(4) of the proposed new Schedule. At the end of the first line of the paragraph there seems to be an extra "that". It says that it,
	"must include provision securing that that the owner of any land over which a right of common is exercisable".
	I would be grateful if the Minister would clarify those points.

Lord Bach: My Lords, we can always live in hope. Amendments Nos. 29, 30 and 31 would remove the power for Natural England and the Countryside Council for Wales to acquire rights of common by severance. These amendments are now old friends. Such was the concern of the House at the powers in the Bill at introduction that we brought forward amendments on Report specifically to constrain the exercise of those powers. Those amendments are now reflected in paragraph 1(2) and (3) of the new schedule and require notice to be given in advance of the powers being used. Effectively, we have introduced a requirement to consult.
	Let me remind the House that the vendor of rights acquired under paragraph 1 must be a willing party. There are no powers in the Bill to require such rights to be sold. Where a sale takes place, the rights will cease to be attached to the land and will instead be held by the commons association, Natural England or the Countryside Council "in gross", although any of these bodies may subsequently reattach the rights to other land under Clause 10. It is not possible under paragraph 1 to sever any part of the land comprising the common or to cause any part of the common to cease to be available for the exercise of rights of common.
	I have often heard arguments that these powers are not needed or will be abused, and that we face problems of under-grazing, not over-grazing. If that is correct—noble Lords will forgive me if I do not sign up to that this afternoon; we have had a friendly exchange about the position over the course of the past few months—then the powers will not be used and commoners have nothing to fear. But if over-grazing does continue to be a problem, we would be foolish to throw out the only tool that can guarantee reduced grazing activity on the common, provided that there are vendors willing to sell.
	In relation to the Countryside Council for Wales and the points put to me by my noble friend, we do not expect the CCW or Natural England to exercise the rights they have acquired and we see no difficulty in reconciling the holding of rights with their statutory functions. Both organisations can and do own land for their statutory purposes. There is nothing incompatible about their owning rights of common. But at the risk of repeating myself, we do not envisage this happening very often. Again, English Nature does not normally acquire rights in order to extinguish them, rather it holds on to them to prevent them being exercised. Where a commoner voluntarily sells his rights, it must be reasonable to assume that he believes the purchase price more than offsets any future loss of income. We believe that that should be a calculation for the commoner to make. It should not be for government to say, "The vendor cannot be trusted to make the decision".
	Amendments Nos. 32, 33 and 34 would effectively remove the powers for commons associations to regulate the temporary letting of rights of common at a local level by making rules for that purpose. We see these powers as enabling local management by the local interests. We are a little surprised that the noble Lord, Lord Livsey, is opposed to that, given that he is himself a great localist. We believe that where a commons association exists, it should have powers to manage the temporary letting of rights rather than having to subscribe to national rules made all those miles away, whether in London or in Cardiff. Paragraph 2(3) specifically provides that local rules are to take precedence over national regulations, a point of particular concern to the noble Baroness, Lady Byford, in Grand Committee. We would resist the amendments.
	Amendment No. 35 takes us to the root of the Government's amendments in this group. It would leave out from government Amendment No. 28 the power to enable the permanent severance of rights by order. I hope that the noble Lord, Lord Livsey, will feel able to support our amendments in this direction. I had hoped that we might achieve support for these compromise measures across the House. Moreover, the first suggestions made by the noble Lord, Lord Inglewood, on this were strongly supported by the Federation of Cumbria Commoners, among others. Let me make one last attempt to reassure the noble Lord that paragraph 3 of the new schedule does not overturn the old order represented by the prohibition on severance in Clause 9, which is the main part of the Bill. That prohibition remains our, and most stakeholders', clear goal. Paragraph 3 is a reserve power only, enabling targeted exceptions after appropriate consultation. Like the noble Lord, Lord Inglewood, we have taken the long view and decided that it would be sensible to have these powers available. That does not mean we intend to use them, and I repeat that we have no plans to do so. If we do, the strong likelihood is that the initiative for an order will come from the commoners themselves. That is only right because the commoners would be those most affected. I am sure the noble Lord would support the making of an order for which the commoners themselves had lobbied.
	There is little I can say today about the defence and support for Dartmoor of the noble Lord, Lord Tyler—which was backed up by the noble Duke—except to acknowledge the success of the Dartmoor Commoners Council and the fact that it has played a part in some of our thinking on the Bill. I do not wish to exaggerate the point—I am sure the noble Lord would not wish to either—but certainly it has been a factor. I can go so far as to say that we will look into the matter, although I cannot give any commitment.
	As always, the noble Duke has been extremely thorough in the way he has examined the amendments because there appears to be an error, with the word "that" appearing twice in paragraph 3(4) of the new schedule. I congratulate him and thank him for his thoroughness.
	Having said that, I am not sure that I can answer his other questions here and now except on the issue of whether there is a requirement for a commons association to be notified of severance of right. A commons association must consent to a severance by virtue, I am advised, of paragraph 1(4). I have spoken to Amendment No. 3, which I have moved.

Baroness Byford: My Lords, in moving Amendment No. 7, I shall speak also to Amendment No. 8. This clause will come into force in accordance with the provisions made by order by the appropriate national authority. We are still waiting for some aspects of the Animal Health Act—which we will be discussing later—to come into being on which we will have no influence once this Bill has left the House. There are matters within the Bill which will have a bearing upon our discussions.
	It is possible that the owner of land might decide—perhaps as a consequence of practical experience of the single farm payment—to sell up. As part of the preparation for the sale, he might have to erect a notice clarifying that the use of a particular field is permissive and that permission is now being withdrawn. Under this clause, unless the Secretary of State had already brought it into force, he would then have to wait for five years to complete the sale even though the notice was not put up until after the Bill had become law. This is a little technical but I hope the Minister is following me.
	On the other hand, had the clause already been brought into force, he would have to wait a mere two years. I wonder how many people would consider it reasonable to be required to wait for two years between deciding to sell their house and being able to put up a "For Sale" notice. If this clause is brought into law, any number of farmers whose land now adjoins a conurbation could be faced with that problem.
	The situation is made worse by the recent changes to the common agricultural policy. There are farmers who are faced with a drop in their income sufficient to wipe out a fairly fragile profit, especially if there is any delay in the new single farm payments, which we will no doubt debate on my Question next week. The process of trying to applying to register land as a town or village green is not specified in the Bill, but if it follows the procedure for establishing rights of way, the application will be made considerably in advance of any decision. Moreover, that decision process will involve both the registration authority and those who are making the application. It is quite reasonable to set a limit of 12 months for the filing of an application. That is the thrust of these two amendments.
	Rather like the matter relating to the Dartmoor Commoners Council, another issue was raised with me only yesterday. I apologise to the Minister. I hope that he will not mind my sharing it with the House, even though I understand that it may not be possible to do anything until the Bill passes to the Commons. I hope the House will forgive me for introducing an additional angle to the debate on this part of the Bill.
	The matter is, I think, of great interest to us all. It is not intended to slow up proceedings, but to ensure that all possible areas of debate are covered before we pass our hard work over to the Commons. The much debated Clause 15 has thrown up yet another problem. It has come to my attention that a retrospective effect of Clause 15(6)(a) could be an unintended loop hole. This ties in with our amendments. If land had been used for a 20-year period and its use ceased five years before the Act, under Clause 15(6)(a), houses which had already been built would be in line for demolition. I shall describe a situation in which this could apply.
	A building society could have fenced a site on commencement of construction works, with the appropriate planning permission, in 2002, and commenced building work. Under the current law, the development could have been completed. I have been made aware of developments where this is the case. The case of which I am aware was challenged by protesters under existing common law, but the challenge was overturned by a public inquiry conducted by a QC and supported by a High Court ruling. Yet I understand that, under Clause 15(6), both those respected and official rulings could be overturned by an oversight. In spite of its comprehensive defeat, the protest against the development would be renewable under this new legislation. I am sure that that is not what is intended. Those who were against the development would have a window until 2007 to attempt to overturn the development or part of the proposed development. It seems that Defra is aware of this problem. A letter which I believe was dated 10 January 2006—I have unfortunately left my copy in my office—has instructed local councils to withhold planning applications on the assumption that village green applications might be made. Surely this is not the operation of a government department through the usual channels. I also refer the Minister to the recent European Court ruling in the case of Pye v UK 2005, in which an attempt by the Government retrospectively to vary a law was found to contradict European rulings on human rights.
	I apologise to the House for the complexity of the matter, but as it is directly relevant to this part of the Bill, it is important that is in Hansard. When the matter moves to the Commons, perhaps Ministers and the department will look into it further. I do not expect the Minister to have clear knowledge on the issue. I beg to move.

Lord Bach: My Lords, I agree with everything that the noble Baroness has just said. Perhaps I may say to the noble Baroness, Lady Byford, that we will study the details of her remarks and that I shall write to her about the application of Clause 15(6) in such a case. I thank her for her comments this afternoon. The matter may very well raise its head in another place, as the noble Baroness, Lady Miller, said.
	Amendments Nos. 7 and 8 relate to a case in which 20 years' recreational use as of right by local inhabitants has already taken place, but is then ended before someone can apply to register the land as a green. Clause 15(3) sets out a "period of grace" for applications; the period of grace is normally to be two years, but there is a transitional provision that when "as of right" use was ended before the clause comes into effect, it is to be five years.
	We resist the literal effect of the amendments, for the same reason that we did so at Report. We do not think that a year is long enough; there needs to be a fair opportunity for an application to be made to register land as a green if it has been used in a qualifying way for at least 20 years, but its use is then brought into question. Once that happens, there is much to do, as I argued at Report, before it is possible to submit a viable application on behalf of local people to register the land as a green—such as those local people having to find out about that area of law, often from scratch. They must do their research, discover that the registration system exists; get hold of guidance material, investigate the detailed criteria for registration; and assess whether they are likely to have a case to make that meets the stringent criteria for registration. They must then find witnesses, and so on.
	As I said in the previous debate, one year may in some cases be long enough for all that to happen, but in others it may not, so our common land policy statement in 2002 said that we were minded to adopt the two-year period of grace that is now provided for. The transitional five-year period of grace reflects the one on which we originally consulted in 2000. It is needed only in a case where "as of right" use has ended before this clause even comes into effect. Until that happens, something as harmless-looking as a "welcome" notice can end even a very lengthy period of "as of right" use. But once Clause 15 takes effect, a challenge to longstanding "as of right" use will have to be overt if it is to be effective: the prohibition notice spoken of in the amendment comes to mind as one means. Once that is the case, the two year period of grace will be sufficient.
	Either way, I remind the House that the period of grace is a maximum period. There is nothing to stop people applying sooner, and they would be well advised not to leave doing so until the last moment. It is a matter of balance. We think that we have it right. A limited period of grace for application is provided. Failure to register land within that period means the opportunity to register is lost. That is very different from the customary law position under which evidence of any 20 years' qualifying use established land permanently as a green, even if the use ended a very long time ago.
	I shall deal with two of the points that the noble Baroness made. It was suggested that applications to register greens might be made speculatively before any proof of use was gathered, and might take a long time to determine. We agree that these issues have to some extent been a problem to date because of the many uncertainties of greens registration law as it stands. One of the key aims of Clause 15 is to reduce these difficulties.
	Providing a limited period of grace—so long as it remains adequate—will take the current panic out of the situation. It will enable local people to assess whether they are likely to be able to make a viable case for registration. Knee-jerk applications should become less prevalent than they have been to date. By simplifying and clarifying the current law we should make it considerably more straightforward for applications to be determined within a reasonable period on the facts and evidence. Of course, proper consideration must continue to be given to the merits of each case. But we would be disappointed if the average determination time did not substantially shrink as a result of this clause.
	Finally, there was the argument that if a landowner who has tolerated over 20 years' recreational use of a piece of land "as of right" now wishes to end such use, he faces a quandary. Should he end it now—making the period of grace for application under subsection (6)(a) five years from the date of doing so? Or should he wait for commencement—which would make the period of grace two years from the date of doing so—but without any certainty as to how soon Clause 15 will be commenced?
	In the end, I am afraid that is a decision that only the landowner can make. But I can assure the House that we will give high priority to ensuring early commencement of Clause 15. This is an important set of provisions and we need to bring them into effect at the earliest opportunity. I hope that the noble Baroness will withdraw the amendment.

Amendment agreed to.

Lord Bach: moved Amendments Nos. 16 to 19:
	Page 18, line 1, leave out "election of members" and insert "appointment of members (by election or otherwise)"
	Page 18, line 2, leave out "elected" and insert "appointed"
	Page 18, line 7, at end insert—
	"( ) The terms referred to in subsection (2)(aa) include in particular terms as to—
	(a) entitlement to elect members;
	(b) entitlement to attend meetings."
	Page 18, line 10, leave out paragraph (b).
	On Question, amendments agreed to.
	Clause 32 [Ancillary powers]:

Lord Bach: My Lords, the amendment clarifies the nature of commons association powers to raise money. It emphasises that an association may apply for funds from any source to raise money. Of course, that includes agri-environment schemes, rural development programmes, heritage lottery funding and any other funding programme currently available. The amendment was prompted by concern expressed by noble Lords that the link between commons associations and agri-environment schemes was not stated more explicitly in the Bill. We have taken the opportunity since Report, as I promised, to explore that issue and concluded that it would be best to make a more explicit reference to the ability of commons associations to raise money from a wide range of sources.
	Our amendment is made to the ancillary powers rather than the functions of commons associations. The activity of raising money from any particular source cannot properly be regarded as a core function. The primary purpose of the association is to engage in activities related to the management of agriculture, vegetation and common rights—not to raise money. Of course, raising money may be an important activity for an association, but it is an ancillary activity that will enable the association to carry out its primary functions.
	Our intention with this amendment is to make it quite clear that an association can raise money through application to any source of funding. This includes agri-environment schemes. Why then do we deliberately avoid the phrase "agri-environment scheme", which appears on an amendment that may be discussed in this group? The government amendment avoids such a mention, which is not to suggest that we do not consider such schemes to be an important source of funding. I have said that we do. We will encourage associations to enter into schemes, such as the higher level environmental stewardship scheme. In many cases, we would expect commons associations to be formed in order to benefit from financial support afforded by such schemes.
	We have not explicitly mentioned agri-environment schemes because, with common land legislation, one has to take the long view. In the decades to come—not in the years ahead—there may be no such thing as an agri-environment scheme. Future funding may take a different form, either as a result of domestic or EU policy changes, and our aim here is to enable associations to adapt to changing circumstances. I repeat that our amendment does this by making explicit that commons associations may apply for funds from any source.
	I hope it is fair to say that a general principle of legislation is that, if a statute gives a body broad powers, as we do here, it is not sensible in the same breath to refer to one detailed example of such a power. To do so may—I repeat, may—tend to undermine the generality of the broad power. This is not out of sympathy with what is behind an amendment that I suspect is about to be spoken to—it is that it is not necessary and would be against the general principle of legislation. I beg to move.

Lord Livsey of Talgarth: My Lords, the Public Bill Office has made a small error by attaching the name of the noble Lord, Lord Selsdon, to this amendment. In old-politics-speak: "I am not Selsdon Man". My name should have been there. It is unfortunate, but I have not beaten anyone up about it or anything like that.
	Amendment No. 23 seeks to insert a new clause into the Bill after Clause 37. We would like to see a federation of commons associations in England with the following functions:
	"the co-ordination of all commons associations in England, who shall be members of the Federation . . . assisting commons associations to achieve their objectives . . . the provision of rules and a constitution for use by voluntary commons associations".
	In subsection (3) of the amendment we propose exactly the same structure for Wales—a federation of commons associations for Wales—with precisely the same functions as the ones I have just read out.
	The amendment seeks to address the frustration expressed by the noble Lord, Lord Plumb, and the noble Baroness, Lady Byford, about the structure of the legislation and, in particular, the fact that it addresses statutory commons when the vast majority of commons—in fact, 99 per cent of them—are voluntary commons. That is the situation in which we find ourselves today. There are so many voluntary commons associations, as other noble Lords have said, because voluntary commons were set up as a result of the Commons Registration Act 1965. So there are no statutory commons existing in any real sense of number.
	We share exactly the same concern as the noble Lord, Lord Plumb, the noble Baroness, Lady Byford, my noble friend Lord Tyler and others—that the powers given to statutory commons and their ability to access funding, particularly for the environment, will be denied to voluntary bodies. Because voluntary commons association are inadequately resourced, many of them—I think I am right in saying that there are 194 in my area—are not in a position to take advantage, nor do they wish to be statutory commons. The uptake, sadly, will be minimal because of the bureaucracy, a lack of staff and so on.
	We envisage that these federations—the overarching bodies referred to by the noble Baroness, Lady Byford—as a possible solution to the problem that we have been discussing for the past three-quarters of an hour or so. The federations in England and Wales could take on a statutory role to enable the voluntary commons associations to participate and to get the benefits into the upland areas—which have quite rightly been described as being so hard pressed—in order that they should become more viable. It is one way of doing it.
	In the Bill as drafted there appears to be a fundamental fracture between the legislation for statutory commons and the overwhelming number of voluntary commons associations. The amendment would help to bring more cohesion to the legislation and assist the process of achieving the Government's desirable objective of improving the situation for those with common rights. We believe that the amendment could be the way forward. It would assist the process; revolutionise the legislation, which currently addresses only statutory commons; and would benefit a far wider number of commons in the voluntary sector. I beg to move.

Baroness Farrington of Ribbleton: My Lords, I was surprised by the noble Lord, Lord Livsey. He knows, as I do, that "here be dragons" in drafting legislation that states, "In Wales, there shall be". I shall not take a route into a wood full of Welsh dragons, because the Welsh people jealously and rightly guard their ability to make their own decisions. I agree with the noble Baroness, Lady Byford, on this matter. Such an association ought to rise from below and not be imposed from above, so that people can choose the form that it takes. It is no good the noble Lord, Lord Greaves, laughing. He does not have the several years' experience that I have had of speaking for the Government on Wales at this Dispatch Box. During that time, I learnt exactly where the ice was thin and where it was not sensible to tread.
	We welcome the idea of establishing federations, but as I and the noble Baroness, Lady Byford, said, they should be developed from the bottom up rather than imposed from above by statute. Such bodies will be more effective if created and managed by committed people who represent the interests of commoners. Providing in legislation that there shall be a federation of commons associations will do nothing to garner the enthusiasm and commitment that would be needed to create such a body. Indeed, the amendment might even hinder the development of an effective organisation by placing unnecessary restrictions on what it may or may not be able to do.
	We have already supported the formation of two federated bodies in England using funds from the England Rural Development Programme, and we are aware of the developing role of the Welsh commoners forum which represents the interests of commons associations in Wales. Those bodies play a valuable role in the provision of advice and information to commoners and the public in the regions in which they operate. They have proved effective also in communicating the concerns of commoners to government departments and agencies. I place on record our welcome for their involvement in briefing on the Bill.
	All the functions for a federation that are proposed in the amendment can be carried out now without waiting for legislation. For example, a federation would be able to assist commons associations in achieving their objectives by providing expert advice and best-practice guidance. A federation might also be able to provide practical advice on development of a constitution and on rule-making; for example, through providing model constitutions and model rules. This would be a valuable service that would assist any voluntary commons association which is considering taking statutory powers. A federation could also provide services for the mediation of difficult issues, perhaps providing persons to act as independent arbitrators in disputes. There is nothing to prevent the development of such a body now if the commoners felt that it would be of value. Legislation is not required. On Dartmoor, for example, many voluntary commoners associations happily coexist with the statutory Dartmoor Commoners Council.
	In answer to the question of the noble Lord, Lord Renton, about the difference between statutory or voluntary groups, I say that a voluntary commons association is a group of common rights holders and others who choose to join together to manage their rights on a common in a more co-operative manner. In answer to the noble Lord, Lord Livsey, I say that voluntary bodies can even now apply for agri-environment funding. Many bodies in England have successfully done so. However, entering a scheme requires near-unanimous support from commoners. This legislation removes that constraint. I am sure that he will welcome that information and hope that the amendment will not be pressed.

Baroness Farrington of Ribbleton: My Lords, I understand why the noble Lord would like on record the contents of the letter sent by my noble friend to all noble Lords who took part in debates on the Bill at various stages. I am delighted to confirm, by repeating what the letter said, that all local authorities, including parish councils, under Section 9 of the Open Spaces Act 1906, may undertake the entire or partial care, management and control of any open space, whether any interest in the soil is transferred to the local authority or not. If the powers are considered by a local authority to be insufficient, we would commend the making of the scheme for the management of the common land under Part 1 of the Commons Act 1899. That is a relatively simple procedure by which a district council, including a unitary authority, or a national park authority, may consult on and make a scheme for the management and regulation of any common. Such powers then being vested in the authority, it is possible for the owner or one-third in value of the commoners to veto a scheme; but if the land is unclaimed and untended, it seems unlikely that a veto would be exercised. We also suggest that approach if the authority is seeking funding through an agri-environmental scheme. The second possibility is that the local interests in a common could apply to the national authority for an order establishing a commons association with representation of those local interests on the governing body. That would be particularly appropriate when unclaimed common land remains important to the local agricultural economy.
	I hope that the noble Lord understands that we simply do not need the powers conferred by his amendment, as they are already amply provided for in Part I of the 1899 Act and Part 2 of this Bill. Those powers have been carefully crafted to balance the various interests in unclaimed common land, and I commend their use. We certainly intend to write a circular to local authorities about their responsibilities under the legislation, and I expect that we shall consult on a circular in due course. I thank the noble Lord for his interest and hope that the reply has been helpful.

Lord Bach: moved Amendment No. 28:
	Before Schedule 1, insert the following new schedule—
	"AUTHORISED SEVERANCE
	:TITLE3:Severance by transfer to public bodies
	1 (1) A right of common to which section 9 applies may on or after the day on which this Schedule comes into force be severed permanently from the land to which it is attached by being transferred on its own to—
	(a) any commons association established for the land;
	(b) Natural England (where the land or any part of it is in England); or
	(c) the Countryside Council for Wales (where the land or any part of it is in Wales).
	(2) Where a person proposes to sever a right of common to which section 9 applies by a transfer under sub-paragraph (1)(b) or (c), Natural England or the Countryside Council for Wales as the case may be must—
	(a) give notice of the proposal to the owner of the land over which the right is exercisable unless his name and address cannot reasonably be ascertained;
	(b) in a case where there is no commons association established for the land, give notice of the proposal to such persons (if any) as they consider represent the interests of persons exercising rights of common over the land.
	(3) A notice under sub-paragraph (2) must be given at least two months before the transfer and must—
	(a) specify the name and address of the owner of the land to which the right is attached;
	(b) describe the right proposed to be transferred, giving such details as regulations may specify;
	(c) state the proposed consideration for the transfer; and
	(d) give such other information as regulations may specify.
	(4) Where a right of common to which section 9 applies is exercisable over land for which a commons association is established, the right may only be severed by a transfer under sub-paragraph (1)(b) or (c) if that association consents to the transfer.
	(5) The severance of a right of common by its transfer under sub-paragraph (1)—
	(a) only has effect if the transfer complies with such requirements as to form and content as regulations may provide; and
	(b) does not operate at law until, on an application under this Schedule, the transferee is registered as the owner of the right in the register of common land or of town or village greens in which the right is registered.

Temporary severance by letting or leasing

2 (1) A right of common to which section 9 applies may, on or after the day on which this Schedule comes into force, to any extent be severed temporarily from the land to which it is attached by virtue of the right, or all or part of the land, being leased or licensed on its own in accordance with—
	(a) provision made by order by the appropriate national authority; or
	(b) rules made in relation to the land by a commons association under section 31.
	(2) Provision under sub-paragraph (1)(a) and rules referred to in sub-paragraph (1)(b) may be framed by reference to—
	(a) particular land or descriptions of land;
	(b) descriptions of persons to whom rights of common may be leased or licensed.
	(3) Where (a) provision under sub-paragraph (1)(a) applies in relation to any land, and
	(b) rules referred to in sub-paragraph (1)(b) also apply in relation to that land and are inconsistent with that provision,
	the rules prevail over that provision, to the extent of the inconsistency, in relation to that land.
	(4) The appropriate national authority may by order provide that the leasing or licensing of a right of common (whether authorised by provision under sub-paragraph (1)(a) or by rules referred to in sub-paragraph (1)(b)) must comply with such requirements as to form and content as the order may provide.

Severance authorised by order

3 (1) The appropriate national authority may by order make provision authorising rights of common to which section 9 applies to be severed permanently from the land to which they are attached by transfer in accordance with that provision.
	(2) Provision under sub-paragraph (1) is to be framed by reference to—
	(a) particular land over which the rights of common are exercisable, or
	(b) particular descriptions of such land,
	and may authorise transfers to particular persons, particular descriptions of persons or any person.
	(3) The appropriate national authority must, before making any provision under sub-paragraph (1) in relation to any land, consult such persons (if any) as it considers represent the interests of—
	(a) persons who own the land;
	(b) persons who exercise rights of common over the land.
	(4) Provision under sub-paragraph (1) must include provision securing that that the owner of any land over which a right of common is exercisable is to be notified, and his consent obtained, before the right may be transferred.
	(5) Provision referred to in sub-paragraph (4) may include provision as to the circumstances in which notification may be regarded as having been given or consent obtained.
	(6) The severance of a right of common by its transfer under provision under sub-paragraph (1)—
	(a) only has effect if the transfer complies with such requirements as to form and content as regulations may provide; and
	(b) does not operate at law until, on an application under this Schedule, the transferee is registered as the owner of the right in the register of common land or of town or village greens in which the right is registered.
	(7) Provision under sub-paragraph (1) may include provision to secure the result that where—
	(a) the person to whom the right of common is transferred is the owner of land to which rights of common are attached, and
	(b) those rights are exercisable over the same land, or substantially the same land, as the right of common being transferred,
	the transferee must, when making an application as specified in sub-paragraph (6)(b), apply to the commons registration authority for the right to be registered as attached to the land referred to in paragraph (a)."
	On Question, amendment agreed to.

Lord Bach: This amendment responds to amendments tabled by the noble Baroness, Lady Byford, in Committee and on Report, which we agreed to consider further. The amendments relate to paragraph 5 of Schedule 1, which is about the deregistration of town or village greens. The criteria for deregistration are set out in sub-paragraph (3). One of those criteria is that, in the 20 years leading up to the provisional registration of the green in the late 1960s, there must have been some physical impediment to use for the whole of that period.
	Sub-paragraph (3) is not revisiting the issue of whether there was enough evidence of qualifying use during the 20-year period, rather it is concerned with the physical impossibility of there having been such use. For example, the registered land may have actually been occupied by a house and garden during the 20-year period in question. We have concluded that the wording of sub-paragraph (3)(a) is not helpful to its understanding and our amendment is, we hope, clearer. The amendment will clarify that the physical impediment must have been present throughout the 20 years preceding registration, rather than some part of that time. The amendment is not intended to effect any substantive change in policy, but merely to clarify the doubt identified in the amendments tabled at earlier stages. I beg to move.

Report received.
	Clause 7 [Further provision relating to statements]:

Baroness Miller of Hendon: In moving the amendment, I shall also speak to Amendments Nos. 3 and 4. They amend Clause 19, which relates to unfair relationships between creditors and debtors. They are different from my other amendment to Clause 19, which I shall move separately, because this little group of three amendments relates to the definition of an unfair relationship, whereas Amendment No. 5 involves an important and vital duty of the creditor towards the debtor.
	Amendment No. 2 empowers the Secretary of State to make regulations specifying that this or that practice is automatically to be deemed unfair. As drafted, the clause is, as the Minister conceded in Committee, deliberately unspecific in order to leave it to the court to decide whether the creditor had been unfair. Your Lordships may recall a notice that used to appear on London buses:
	"Small dogs may be carried at the discretion of the conductor".
	The question was always, how small is a small dog? The answer always was acknowledged to be whatever size the conductor said. How long is a piece of string? I entirely agree with the objective of being as unspecific as possible because it is impossible to define every unfair practice, and because a list of malpractices in the Bill might infer that whatever is not expressly prohibited is permitted.
	The ingenuity of bad lenders in dreaming up new schemes or scams is so extensive that we cannot allow matters to be set in legislative concrete. On the other hand, if there is a practice which is clearly unfair or undesirable, there is no reason why the Secretary of State should not say so in a regulation approved by Parliament to protect debtors, and to avoid the necessity of them having to go to court for protection.
	We have to bear in mind that the debtor is almost inevitably in a weaker position, and because of that, and possibly through ignorance of his rights, he may simply find himself liable for a debt that he should not be intimidated from contesting. With vast swathes of legislation going back over centuries, not only has the law been interpreted by judges, but the same judges have made rulings on the facts. In almost every case, the judge has to decide whether he believes one side or the other, or whose version of the facts is correct.
	Therefore, I have no objection to decisions left to the court about whether the terms are unfair in a particular case. But one of the objectives of the Bill should be to prevent cases coming to court in the first place. That would be achieved if, in the case of some scheme involving a serious malpractice, the Secretary of State could cut it off at the root without waiting for the outcome of some drawn-out piece of litigation, or for it to continue for too long simply because there is no debtor with the resources to contest it. I emphasise that the amendment does not detract in any way from the flexibility desired by the Government regarding the interpretation of unfairness. It simply enables the Secretary of State to say so when something manifestly is unfair.
	The noble Lord, Lord Razzall, has indicated his support for the amendment, and I am very grateful to him. Perhaps that alone will persuade the Minister that this constructive provision has wide support.
	Amendment No. 3 simply requires that the terms on which a creditor seeks to rely be written in plain intelligible language—intelligible, that is, to the debtor, and not necessarily to a member of the Chancery Bar. It will still be up to the court to decide whether the language of the agreement is clear and intelligible. Leaving aside the fact that the terms applying to many credit card and store cards are often printed in microscopic typefaces, the least standard that should apply should be that those terms be readily understandable by the debtor.
	In legislation governing credit terms—for example, hire purchase—the law stipulates that certain provisions must be printed no less legibly than the rest of the document. There is no point in printing legibly if they are also legal gobbledegook. Amendment No. 3 does not add any burden or give any problem to any lender who is acting with integrity. Amendment No. 4 has a corollary which entails the alteration of the burden of proof. It is right and proper that if a term of a credit agreement has been expressed in clear, intelligible language, the ordinary rule should apply—if you sign something, you are bound by it.
	Voltaire once said:
	"God is always on the side of the big battalions".
	This group of amendments is designed to prevent some of the excellent provisions of the Bill becoming the subject of endless legislation in cases where the creditors enjoy an economic advantage of deeper pockets and more resources than the individual debtors. I beg to move.

Lord Borrie: My Lords, I regret that I was unable to attend Committee and therefore have not been able to speak on the important matter of Clause 19 and amendments to it. To my mind, Clause 19 is an extremely welcome change from the unworkable clause concerning extortionate credit agreements in the 1974 Act. I think that there is common agreement in the House on that. The hurdles for the debtor to prove an extortionate credit agreement were far too high. Indeed, I notice that a notable Conservative financier—the noble Lord, Lord Griffiths of Fforestfach, who was chairman of a commission on personal debt—took the same view in the report that was published a few months ago.
	Clause 19 covers any term or any conduct of the creditor that is unfair to the debtor. Its intention—if we leave aside the amendments for the moment—is that it should be for the courts to consider the circumstances in any particular case and to determine whether the creditor/debtor relationship is unfair. I see the amendment as having laudable objectives to make more certain and clearer to creditors what the circumstances may be in which a creditor/debtor relationship should be treated as unfair. As the Bill stands, the meaning of "unfair" is, as I suppose the noble Baroness would say, as broad as it is long. It is left entirely to litigation through the courts, which is inevitably haphazard as to whether it provides useful precedents, to determine in the circumstances of any particular case whether a relationship is unfair.
	Consumer organisations and others have, over the years, described considerable numbers of situations in which either the terms of the agreement or the way in which the creditor behaved to the debtor were harsh and unfair and the creditor ought to have been penalised. The noble Baroness, Lady Miller of Hendon, may think that these situations can be picked out from the examples that have been produced over the years and listed in regulations as amounting to unfair conduct or behaviour. The trouble is that how harsh or unfair such terms or conduct may be often depends on the particular circumstances of the creditor and debtor concerned. Regulations could not, I submit, specify all the possible circumstances and variations that might arise. Moreover, regulations would never be up-to-date because, unfortunately, creditors—or at least the worst kind of creditors—can be amazingly imaginative in developing fresh forms of harshness and unfairness. Further, if you list types of unfairness in legislative form, a court might well jump to the conclusion that other terms and types of conduct which are arguably unfair are not unfair.
	The Bill, rightly in my view, wants the court to look at the creditor/debtor relationship as a whole without being biased in one way or another by a regulatory list. Flexibility is needed. I call in aid two more Conservative Peers, as they are members of the Joint Committee on Human Rights—namely, the noble Lord, Lord Bowness, and the noble Lord, Lord Campbell of Alloway. In the report published in October on this Bill, they make the point that,
	"some laws are required 'by their subject matter' to be flexible".
	They say, as members of the House of Lords and House of Commons Joint Committee on Human Rights:
	"We consider that the subject matter of the present law, namely consumer protection in the context of credit agreements, is such as to require a degree of flexibility".
	They go on to make two other relevant points—I apologise for summarising them, but it is all set out in the report. They say that suitable guidance is available as to the meaning of the word "fair" in case law interpreting the same term in other closely analogous statutory contexts, which they set out. They also make the point that creditors of all kinds who may be affected by the law can be expected to obtain their own legal advice as to which way a court might go on any particular relationship that the creditor has with a debtor.
	I am sorry to go on at some length but perhaps I may just mention Amendment No. 3, which is linked with this. I do not really see value in saying specifically that plain, intelligible language should be used because, if the language is not plain and intelligible, the relationship between the creditor and the debtor is likely to be unfair. But if the language is plain and intelligible, the relationship may still be unfair.
	Amendment No. 4 is undesirable because it is much more consistent to say that the burden should always be on the creditor to prove that the relationship alleged to be unfair is fair in all the circumstances. Incidentally—this is a small point—why does Amendment No. 3 refer to the terms being "plain" and "intelligible" and Amendment No. 4 "clear" and "intelligible"? Perhaps they are meant to be the same.

Lord Freeman: My Lords, like the noble Lord, Lord Borrie, I also regret not having been present in Grand Committee but, unlike the noble Lord, I cannot agree with his arguments. I strongly support my noble friend Lady Miller in Amendments Nos. 2, 3 and 4, and I speak from past experience as the Minister responsible in the previous government for what was then called the Deregulation Task Force and is now called the Better Regulation Task Force.
	One of my main reasons for strongly supporting the amendments is that the principles of good regulation should always be adhered to, even though some flexibility may be lost. I understand the strength of the argument but, on balance, I believe that the first principle of good regulation is, as is covered in Amendment No. 2, that the regulations may make provision indicating the circumstances. I believe that one needs to be as certain as possible, in protection of both the creditor and the debtor, in stating what is unfair in the relationship. In this instance, I do not think that reliance on court interpretation is correct. In my judgment, consistency and certainty are more important to protect the interests of both borrower and lender.
	Finally, the second principle is enshrined in Amendments Nos. 3 and 4 by referring to the need for plain, intelligible language. I welcome that. For those reasons, I support Amendments Nos. 2, 3 and 4.

Lord Beaumont of Whitley: My Lords, the object of the amendment is to put on the face of the Bill considerations that some noble Lords may have read in a letter from the Zaccheus 2000 Trust in the Independent today. The purpose of the amendment is to inject into the Bill some certainty that the circumstances of vulnerable households will be taken into account when the courts consider a determination on Clause 19, unfair relationships. I move the amendment so that the case I am putting is recorded in Hansard and so should be able to be taken into consideration when the Government come to consider these matters as they have promised to do under a later clause.
	There have been rich pickings for 30 years despite the law, with legal door-to-door companies such as Provident plc regularly lending £1,000 with £700 interest repayable over a year to unemployed parents who receive income support at levels below the Government's poverty thresholds. They are in poverty; they are desperate at Christmas time or when buying school clothes, and often have other debts. They turn to any port in a storm, never questioning whether the terms of the loan are unfair. There is no certainty in the Bill that those circumstances will ever be taken into account when courts are determining the meaning of "unfair relationships".
	My amendment requires a court to have regard to the personal and financial circumstances, health and literacy of the borrower, and the extent to which these matters were taken into account by the lender. The Bill requires courts to have regard to all relevant matters. Unfortunately, as noble Lords have said, it is far from clear what a relevant matter may be—a problem which also exists with the concept of extortionate bargains, which the Consumer Credit Bill is set to repeal.
	There are two different approaches. The court may take a narrow approach on the meaning of "unfair relationship", or a wider one. On the narrower approach, the court may consider itself limited to the solely commercial aspects of the loan, such as interest rates, credit charges, the overall amount paid for credit and repayment issues. The bargain may be considered solely in commercial terms, determined by banking and market practice and the terms of the contract itself. The blanket freedom to contract on any terms at common law and the rules of statutory interpretation would be the ultimate fall-back position for lenders and credit brokers, and has the potential to generate much argument. That would undoubtedly be the meaning that the expensive lawyers of the credit industry will maintain was the true intention of Parliament in any test of legislation, unless Parliament is prepared to state otherwise.
	A wider approach by the court could encompass such things as capacity, bargaining power of the parties, the income, expenditure and debts of the borrower, poverty, age and disability at the time the contract was made, effects on third parties—such as spouses and children—and the extent to which a lender should have taken these into consideration. It might cover the deemed or actual knowledge of the lender. Then the social goals and aims in protecting vulnerable consumers, their families and the consequences of enforcement upon them, would be considered.
	Few consumers, citizens advice bureaux or local solicitors would be equipped to deal with such arguments in a contested hearing if the court is not required to take them into account. Legal aid is granted on the assumption that there is a chance of winning the case, and is hard to come by under the provisions of the Legal Services Commission.
	The practical difficulty is that cases involving unfair relationships will vary immensely on the facts. Although terms and conditions may be standardised, the circumstances of each consumer will differ. Which circumstances will be considered relevant? Uncertainty over the scope of the judge's powers in such a case will mean subjective value judgments and assessments of the consumer will inevitably impinge on the exercise of the court's discretion. This runs contrary to one of the basic principles in the law of contract: the creation of certainty in business relationships.
	Coldunell Ltd v Gallon was a Court of Appeal decision on the meaning of extortionate credit bargains. The defendant's son, a man in his fifties, borrowed money with his elderly parents of 86 and 91 providing security of their home for a short-term loan at 20 per cent interest. The plaintiff's managing director was aware of the son's position, but made no enquiries about the position of the parents and instructed solicitors to make arrangements. The parents received no independent advice and signed the contract. The son defaulted after four payments of interest had been made, thus having paid 80 per cent interest on the loan. The plaintiffs sought payment on the loan and the interest or, failing that, possession. The county court discharged the debt, accepting that the signature had been obtained by undue influence from the son, tainting the lender's transaction. The court further decided that the bargain was not extortionate.
	At the Court of Appeal, it was held that the bargain was a proper commercial bargain, in which the lenders had acted like ordinary commercial lenders; and that a lender could not be expected to do more than properly and fairly point out to a guarantor the desirability of obtaining independent advice, and to require that the documents be executed in the presence of another. To expect a lender to ensure that the guarantor obtained legal advice, and to guard against the interception of the documents, would have extended the established principles to a dangerous extent that was not warranted. As a consequence, the elderly couple were forced to sell their home. From the way in which the Consumer Credit Bill is currently drafted, one cannot determine whether the facts would be cast as an unfair relationship or not.
	Working out valid legal principles to determine which matters might be relevant when deciding which contracts should be considered extortionate has proved very difficult, and is likely to be just as difficult in the new test of unfair relationships. If a parliamentary committee drafting the law cannot determine the issue at this stage, can an answer be expected from the county court? Unless Parliament clearly indicates that its intention is to protect people in vulnerable situations, within the legislation, there is every possibility that the legislation may be interpreted in a narrow way, and important considerations overlooked in the operation of the system in the county court.
	Both the Green and White Papers on the future of civil enforcement express the intention to protect vulnerable people from excessive enforcement. It would be consistent with this aim to make statutory provision enabling a court to identify a party as vulnerable at an early stage, and to take appropriate action.
	We often include the concept of reasonableness in legislation which passes through your Lordships' House, and it has not always proved to be enforceable in the courts. There is no certainty in this Bill that vulnerable borrowers will be protected. Likewise, there is no certainty that courts will oblige the Government by filling the legal lacuna of "unfair relationships" that has been created in Clause 19. I beg to move.

Baroness Miller of Hendon: My Lords, this amendment is similar to one that I tabled in Committee. In simple terms, it places an obligation on creditors whose activities are governed by the Act to ensure that the proposed debtor has the means to meet the obligations he is taking on. In Committee, I could not press it and, in any event, I wanted to consider the objection that the Minister had to my original amendment.
	Our Chief Whip has just told me—in our little chat a moment ago, when I nearly missed saying "not moved" on Amendment No. 4—that although we thought that the prohibition against voting tonight would end at 7.10 pm, when the photograph was to be complete, so many noble Lords are going out to have dinner that he has agreed with the noble Lord, Lord Grocott, that we shall not vote for the rest of the evening. Under these circumstances, we reserve our position on all the amendments because, if we do not, and we cannot bring them back at Third Reading, we will not have been able to vote on them anywhere: not in Grand Committee, not on Report and, as is the custom, not on more than one of them at Third Reading.
	I hope the Minister will be gratified to note that I have taken his specific objection fully into account and have modified my amendment in the light of his comments. Originally, I suggested exempting clearing banks, building societies and housing associations, small hire-purchase agreements and loans by individuals or pawnbrokers. However, the Minister complained that that would create,
	"categories of lenders who might be regarded as 'good' and . . . those . . . who are 'not so good'".—[Official Report, 8/11/05; col. GC163.]
	Well, far be it from me to be so judgmental. I came to the conclusion that I could accommodate his objection, not because I agreed with it, but by tarring all creditors with the same brush, as the Government desire. This is because I believe that the type of creditor whom I wanted to exempt from the not-very-onerous provisions of the new clause was following that desirable, indeed, essential practice in any case.
	The amendment introduces a new Section in the 1974 Act that my marginal note describes as the "duty of creditors". In essence, the duty it imposes on creditors is the simple, sensible and appropriate one of requiring them to make inquiries about the ability of a debtor to pay before granting any credit or increase in credit. At Second Reading, and in Grand Committee, I reminded your Lordships of the notorious Meadows case, where an original liability of just £5,750 ballooned to a staggering £384,000 and the court used judicial ingenuity to cancel the debt. I also referred to the case of a student, Rose Heiney, who was approved for her third gold card in two months, with a credit limit of £6,000 and drawing facilities of £500 in cash every day. Several times a day, advertisements appear on the television offering credit facilities to people notwithstanding their poor credit rating or them being subject to county court judgments.
	Subsection (3) of the amendment requires the potential creditor to make only,
	"such enquiries as may be reasonable and available".
	The subsection goes even further to modify the creditor's obligation to make enquiries. He is allowed to rely on any written statements of the debtor that are not manifestly incorrect or improbable. On the other hand, it will be of no use for a creditor to accept without proof that a student living in digs is in receipt of an annual income of tens of thousands of pounds a year or possesses assets of millions. To facilitate the checking of information provided by a potential debtor, subsection (6) allows the Data Protection Registrar to allow the exchange of information between creditors about the credit history of an applicant.
	The sanction for non-compliance with this section, that is, failure to check the creditworthiness of the potential debtor, is to be found in the proposed new section 140A. Under new section 140A(1)(c), the court is to have the power to rule that a transaction shall be presumed to be unfair because of:
	"any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement . . . )".
	One of the things that would not have been done would have been to make adequate enquiries about the debtor's ability to pay. Adequate in this case means taking into account the very moderate and simple enquiries that proposed subsection (3) of this amendment requires. New Clause 140A gives the court very wide discretion to decide whether a relationship is unfair. Subsection (1) begins by stating that the court "may" make an order. Subsection (2) states that,
	"the court shall have regard to all matters it thinks relevant".
	The proposed new Clause 140AA is a necessary adjunct to new Clause 140A because it will concentrate the court's mind on the question of responsible lending. I hope it will also, when spelled out in black and white, concentrate the minds of those creditors who do not adequately take into account the debtor's ability to pay.
	I hope that the Minister will now agree that I have accommodated his one and only objection to the amendment as previously drafted—at least, it was the only objection that he raised at the time—and will now accept it as a useful strengthening of the Act by protecting potentially vulnerable debtors without adding one iota of burden to those creditors who already act responsibly. I beg to move.

Baroness Miller of Hendon: I beg leave to withdraw the amendment.

Lord Razzall: I realise that this is another attempt on the part of the Opposition parties to move the Government further than they want to go, but it is important, for the reasons that the noble Lord, Lord Beaumont of Whitley, whom I see is no longer in his place, gave on his amendment. This amendment is dear to the heart of the citizens advice bureaux movement which, as we know, is at the forefront of dealing with the problems of those least well off in our society, the disadvantaged, with what citizens advice bureaux and, I think, the Government, perceive as irresponsible lending.
	I do not want to go over all the arguments that we had in Grand Committee. In Committee, this amendment was moved by the noble Lord, Lord Borrie, whom I see in his place. The Government need to be absolutely certain if they are to reject the amendment that it is unreasonable. As the Minister said on several occasions, the Government have a policy to avoid irresponsible lending and think that the Bill should do that. This amendment, which is small in words but important in principle, should be treated seriously by the Government. I hope that they will seriously consider including it. I beg to move.

Lord De Mauley: My Lords, as I explained in Committee, this amendment introduces the concept that any use by the OFT of what are called intermediate powers under the licensing provisions must be capable of being objectively justified. I said that while we supported the broad thrust of the reforms to the licensing regime, we were concerned with the wide discretion given to the OFT under Clause 38. Amending Clause 38 so that the OFT had reasonable grounds to impose requirements on licensees, as opposed to being dissatisfied with a licensee's conduct, would provide some of the consistency and clarity that the industry should expect from the OFT when discharging its functions under the Act.
	The key provision in Clause 38 allows the OFT to take action against a business when it is dissatisfied with any matter in connection with that business, whether or not it relates to a licensing issue. I have explained at length that in our view that gives far too wide a discretion to the OFT. The discretion should instead be restricted to circumstances in which there has been a breach of the licensing criteria, which themselves should be objectively set.
	I have pointed out the concerns raised by the Joint Committee on Human Rights, which among other things went to the broad drafting, the lack of specificity in relation to the conditions in which the OFT's powers were exercisable, and the entirely unfettered scope of such power, which failed to satisfy the requirements of reasonable legal certainty and gave rise to the risk of the disproportionate use of power in practice.
	In responding to our concerns with the discretion allowed to the OFT in the event that it is "dissatisfied", in the debate on this amendment in Grand Committee, as in the case of the previous amendment, the Minister pleaded the Cabinet Office enforcement concordat. We respond, as we did to the previous amendment, that the concordat is voluntary, is widely ignored and is more honoured in its breach than its observance, and that because of this and other problems it is well acknowledged that it needs to be revised. The Minister also said that,
	"the OFT should be able to act to protect consumers. That is why we have proposed this power to impose requirements on licensees. The OFT has produced a note on requirements, which is in the House Library and gives more information on how the OFT intends to use this power".—[Official Report, 16/11/05; col. GC 311.]
	The note is helpful but it does not resolve our concerns. Much of it is vague. Other sections repeat parts of the Bill and focus on procedural matters. Key issues on where the boundary lies are not discussed in great detail. There is one part of the guidance that we find particularly helpful, however. It states:
	"The OFT will normally be dissatisfied with a licensee or applicant's conduct if the OFT has evidence that the conduct: causes or could cause consumer detriment and is directly linked to the activities covered by the licence or the licence applied for".
	Why, though, could we not have had that in the Bill? It is a vitally important principle.
	In Grand Committee on this amendment the Minister gave two examples where the OFT might take action if it were dissatisfied: one was where there were problems with certain employees of a lender explaining credit agreements to customers; and the other where a debt collector's employees were unfairly pressurising customers by calling very late at night. He said:
	"The amendment before us would severely limit the effectiveness and flexibility of the OFT's powers to impose requirements on licensees by limiting the circumstances under which it could impose requirements. I have explained that we are not talking about fitness to hold a licence or breaching specific provisions in the Act, but about general conduct of a licensee that could cause consumer detriment. Neither of the examples that I have just given breach any specific provision in the Act, but I am sure that Members of the Committee will agree that they are likely to cause considerable consumer detriment, and that something should be done to deal with that. That is what the requirements are intended for. The amendment would prevent those cases being dealt with because of the way in which it limits the circumstances in which the requirements could be imposed. That would reduce consumer protection as the OFT's ability to improve the conduct of licensed business would be curtailed".—[Official Report, 16/11/05; col. GC 311.]
	Of course the Bill would allow the OFT to deal with the two examples to which the Minister referred—that is what Clause 19 on unfair relationships is meant to deal with. So the Minister's objections to it are unconvincing.
	The Minister, in responding to the quote from the JCHR in Grand Committee said:
	"There is, therefore, a very good argument that those powers fall within the exception to Article 1 Protocol 1 of the convention; that is, they are not about taking away assets from people, but about controlling the use of those possessions, which is why it is compatible with human rights legislation".—[Official Report, 16/11/05; col. GC 312.]
	In the opinion of one of the most eminent lawyers in this area, Michael Beloff QC, which many of your Lordships will have seen, on the contrary, there is indeed a significant risk of incompatibility with Article 1 Protocol 1. Whether he or the Government are right, this is clearly a grey area. Surely, if only to obviate the considerable legal costs that will undoubtedly be incurred should the legislation proceed as drafted, it would be simply irresponsible not to do all that reasonably can be done to remove that risk. That is what the amendment seeks to achieve. I beg to move.

Lord McKenzie of Luton: My Lords, Clause 38 enables the OFT to interpose intermediate sanctions on licensees. These sanctions are called requirements.
	As was explained by my noble friend the Minister in Grand Committee, requirements are an important new tool for the OFT to ensure an effective, targeted licensing regime. Currently the OFT's powers are limited to refusal of an application or granting a licence on different terms. They can also vary, revoke or suspend an existing licence. The effects of these sanctions can be severe as they can prevent people trading.
	The OFT adheres to the Cabinet Office enforcement concordat. It might be voluntary, but I stress that the OFT adheres to it. This means that the regulatory action it takes must minimise the costs of compliance to business by ensuring that any action be proportionate to the detriment caused. This in turn means that the OFT is able to act only in the most serious cases, where a person is simply not fit to hold a licence.
	In many cases, the OFT is powerless to address consumer detriment because withdrawing a licence would be disproportionate. For example, if there were a problem with the sale of credit in one branch of a national company, it would not be justifiable to revoke the whole company's licence. A similar situation occurs where one employee is intimidating customers when collecting debts.
	These cases may not be serious enough to call into question the fitness of a person to hold a licence but the OFT should be able to act to protect consumers. That is why we have proposed this power to impose requirements on licensees. The OFT has produced a note on requirements, which was acknowledged and is in the House Library. It gives more information on how the OFT intends to use this power. It states that dissatisfaction is dependent on the OFT having evidence that the conduct causes, or could cause, consumer detriment and is directly linked to the activities covered by the licence or licence applied for. The note also gives examples of cases where requirements may be considered. The OFT is statutorily obliged to have regard to its guidance in exercising the requirements power.
	Again I refer to practical examples, although they may have been pre-empted to a certain extent by the noble Lord, Lord De Mauley. The OFT could use this power to address a wide range of problems. I state again that if there were problems with certain employees explaining credit agreements to customers, a requirement for training employees could be imposed. It might provide that sales representatives in a named branch are trained to inform consumers how they can cancel their agreements. If a debt collector's employees were unfairly pressurising customers by calling very late at night, a requirement could stipulate that they should call only between 8 am and 8 pm. A requirement might also refer to a person other than the licensee. However, it would be addressed to and binding on the licensee and it could require that a particular person did not undertake a specific activity, such as collecting debts in person.
	The amendment would severely limit the effectiveness and flexibility of the OFT's power to impose requirements on licensees by limiting the circumstances under which it could impose requirements. I have explained that we are not talking about fitness to hold a licence or breaching specific provisions in the Act but about general conduct of a licensee that could cause consumer detriment. Neither of the examples I have just given breach any specific provision in the Act, as they would need to before requirements could be imposed under the amendment before us, but I am sure that your Lordships will agree that they are likely to cause considerable consumer detriment and that something should be done to deal with this. Indeed, the noble Lord said that there is general agreement on the principle of intermediate sanctions. That is what requirements are intended for. Unfortunately, the amendment would prevent these cases being dealt with at all because of the way in which it would limit the circumstances in which requirements could be imposed. That would reduce consumer protection as the OFT's ability to improve the conduct of licensed businesses would be curtailed.
	I still believe that sufficient safeguards are built into the Bill to prevent the OFT abusing the powers in Clause 38. The OFT will publish guidance on how it will use these powers. As I have indicated, an OFT note on requirements has already been lodged in the Library. The OFT will have to let licensees know that it is minded to impose requirements, to explain why, and to give them an opportunity to make representations on the proposal. Moreover, requirements can be appealed to the new appeals tribunal. This provides a safeguard against the OFT exercising these powers unreasonably. I urge the noble Lord not to weaken the extra consumer protection which the Bill brings and hope that he will agree to withdraw his amendment.

Lord McKenzie of Luton: My Lords, this is a technical amendment to change sub-section (3) of new Section 36F to ensure that the clause does what was originally intended.
	Clause 50 deals with officers of enforcement authorities other than the OFT. New Section 36F(2) makes the OFT responsible for the actions of these officers while they are fulfilling their duties under Section 36C (access to premises) and Section 36D (access to premises under warrant). However, new Section 36F(3) disapplies new Section 36F(2) in the case of criminal proceedings against an officer or the enforcement authority. It does not currently mention the OFT, and we believe that, for the sake of clarity, the OFT should be specifically mentioned. This amendment therefore just clarifies the position as originally intended. I beg to move.